Direct tax revenue development has been encouraging so far and the tax department hopes to collect more than budget estimates, Central Board of Direct Taxes (CBDT) Chair Sangeeta Singh said in an interview with Mayura Janwalkar. Singh noted the concerns raised regarding the wording of the Virtual Digital Assets (VDAs) Tax Act, saying they are “looking into these concerns” and the intent of the soon-to-be-released guidelines is to further clarify the issue . Edited excerpts:
The share of direct taxes should increase. How do you rate sales growth for FY23? Is it expected to exceed budget targets even this fiscal year?
In the last financial year we have collected Rs 14.09 lakh crore. The budget expectation for this year as of now is Rs 14.2 lakh crore. We hope and expect to collect many more. The trends so far encourage us to go down this path. Aside from that inflation and a few things that have happened, the overall trend in the economy seems to be going well in April and May. So the trends are encouraging and we hope to be able to collect significantly more taxes than last year.
The Income Tax Office has spoken about an increase in the tax base…
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When we talk about increasing the tax base, we mean that there should be many more people filing tax returns. In the last financial year we received a total of 7.14 crore of returns, which is much higher than the number we received the year before. When we say we expect to expand the tax base, we expect those whose income becomes taxable to file their returns and comply with the tax laws. This is the broadening of the tax base. To counteract this, we run outreach programs, we take out CDs, we have a Samvaad channel on YouTube where our officials explain what the regulations are, how tax returns are filed, how we process them, how tax returns are issued and what you do Taxes are deductions that we also make in physical and online outreach programs. We also share the information we have about the taxpayer with that taxpayer. If you are on portals, we have the Annual Information Statement (AIS) in which we show you what information we have about you, transactions, the taxes you have paid, your savings bank interest.
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If you have taxable income and you haven’t disclosed these activities – sometimes it’s sheer forgetfulness, you don’t remember a transaction taking place – you can check all of this and file your tax return. In the most recent Budget 2022 we have a provision called Updated Statement… You file your income statement, but if they share the information with you and realize you have left out something that should have been included in return, you can update it on your return. We’re introducing provisions that make it easier for a taxpayer to correct errors or omissions in their tax returns. As a next step, we will submit the income tax returns in advance. Not for everyone, because business people are in a slightly different position than employees. We will progressively move to the next level to make it easier for a taxpayer to file their returns.
Transactions are monitored more closely via the AIS. Are there categories/segments that show higher levels of tax evasion?
In the language of the tax officials, it is usually not about tax evasion by the common man. Evasion is actually a very strong word in the language of tax officials. Sometimes people don’t get it, sometimes they don’t have the right advice, and sometimes it’s just forgetfulness for an employee who isn’t actively involved with stocks and all. For all of these, this Information Sharing, the Policy on Revising Your Returns and Updating Your Return are helpful policies. However much you simplify, there will be some complexity involved. We’ve also seen many times that people don’t realize that even if their taxes have been deducted at source, compliance is to file a tax return.
The Income Tax Agency clarified Wednesday that the tax rate for virtual digital assets (cryptocurrency) will not change and will remain 1 percent, not 0.1 percent. Any changes to the cryptocurrency tax structure planned?
I can’t talk about that. You’ll know when we issue our policies. As you know, the intention is to explain this further, but not at this time.
Experts say the wording in the Virtual Digital Assets (VDAs) Act is so vague it will lend itself to litigation. Are steps being taken to tighten the definitions?
We’ll have to wait for the documentation to come out. Many concerns have been expressed in relation to the VDA. We look at these concerns.
The Treasury’s intention in the budget was that the filing of appeals before the tribunal and the supreme courts would be largely minimized. What steps is the department taking to reduce the burden of litigation?
To minimize litigation, we introduced another new provision this year. This is a provision that allows us to avoid repeated appeals. The number of legal disputes is therefore intended to be reduced by this provision. When we speak of repeated appeals, both parties must agree that it is the same issue that is at issue. For example, if “X” is an assessee and the department says this year’s question is exactly the same as last year, X must say yes, it’s exactly the same. Only then can we avoid a complaint. There’s no other way to do it. It cannot be said unilaterally that this is a repetition. So we brought provisions. It’s being implemented now, so this fiscal year we’ll know what the impact is.
What are the various activities that are part of the Goa Treasury Department ‘iconic week’ that are part of the Azadi Ka Amrit Mahotsav?
Especially for this Iconic Week we have programs that inform us about the development of the country and the contribution of the department to this development and also what changes have been made in the department. There will be a video film that we will show. We also have sand art in Puri, Odisha by Padma Shri artist Sudarsan Pattnaik (will be initiated virtually) on the theme of taxes and state building. This shows where taxes have gone 75 years from now and how the country has evolved as taxes are used for development work. That was until 75 years so far.
Then there is also the possibility of carrying this over to 100 years (of independence). For the first time in its history, the department is addressing today’s young adults and young people – the taxpayers of tomorrow. When we educate young children and teens what taxes are, when income taxes are due, what you do to pay your taxes, and then what taxes do to build a nation, through an interesting series of games, puzzles, comics we will inculcate these values in children. We have congratulated athletes, good taxpayers and some of our department’s oldest retirees at all ranks, including a 98-year-old in Hyderabad.